The possible changes and impact of the EA layoffs & Playfish Acquisition

Yesterday our industry saw some of the biggest changes we’ve seen in one day, with EA announcing the $400 million acquisition of social gaming startup Playfish, and the 1,500+ person downsizing and studio closures at EA. I totally agree with Shacknews’ Garnett Lee when he wrote in a column yesterday, “As the dust settles this marks one of the most dramatic signs of the times for the videogame industry“.  What I would like to do is share some of my thoughts on what this might mean for the game industry and some possible outcomes that I see from this huge change.  Some of this may dip more into “What is the new game industry”, rather than just what will happen in the aftermath of the changes at EA.

More social game company investment and development

A $400 million exit is a pretty good indicator that the social game market is huge, and that doesn’t even take into account the hundreds of millions of dollars a year companies like Zynga are making (Zynga is a competitor to Playfish, with games like Farmville and Mafia Wars in their portfolio).  These companies are crushing it, with what I’m guessing is huge profit margins.  These games aren’t particularly complicated..and in most cases aren’t even original.  They’ve got to be cheap to make and maintain, and the money that is made on microtransactions and offers is huge.  This market was already expanding quite rapidly, but I’m betting this encourages more game developers (that are now unemployed?) to create new businesses, and it encourages more Venture Capitalists to invest a few million in a social gaming startup.

More “social” elements and micro-transaction models in EA portfolio games

This isn’t anything particularly new, considering EA has been dabbling with this stuff for awhile now.  Most recently we saw them launch Battlefield Heroes, a free-to-play, micro-transaction funded game based on the popular Battlefield franchise.  I’m not sure how well it has done since launch, but I’m interested in seeing how many more games we’ll be seeing from EA that are micro-transaction based.

This should also manifest itself in the form of more paid DLC for released games, which EA has said “extend the life and profitability of our disc-based games“.  Last week Dragon Age: Origins released and had DLC immediately available, and EA reports that they have “seen strong early performance”.

More engaging social game experiences

In my opinion..most Facebook games are pretty lame.  I don’t feel particularly invested or engaged with the games, with most of the motivation for playing coming from the competition with friends to be a higher level Mobster/Farmer/whatever.  Ultimately everyone is the same, with your character and farm looking exactly the same as all the other players.  I never feel invested in my characters or the games themselves, which I think is a lost opportunity.

I personally would like to see more engaging and interesting experiences – something more along the lines of Quake Wars or even Battlefield Heroes, but in the browser and as a Facebook game.  I’ve never played a Facebook game that blew my socks off, and I’d like to see that changed.

Enthusiast Press will start covering the social game space

I think it has been interesting to note the lack of coverage of the social game market by the enthusiast press (Joystiq, 1up, Shacknews, Kotaku, Destructoid, etc).  I understand why they do it, though, since they’re writing content for their community, and most of their community probably doesn’t find this stuff very interesting.  If perhaps the game experiences become more interesting and advanced, the coverage of the space will start to increase.  Or maybe if EA continues to dump millions and millions of dollars into the space the enthusiast press (and hardcore gaming community) will have to take notice.

It’s probably worth noting that EA owns, a company that makes free internet games and casual retail games, and the enthusiast press don’t really cover that side of EA’s business…so perhaps this one won’t come true 😉

Opportunities for game developers and publishers

I’m wondering what Activision thinks about all of this…Do they see a big opportunity to take market share in the vacuum that may form from all of the EA titles being canceled, or will Activision follow suit and join the social gaming market?

Since so many developers are now out of work, now is a great time for new businesses to be created.  Hopefully we will see all these creative and talented folks start new game companies that will push the boundaries and do interesting things.  The traditional big publisher model of funding isn’t the only way to go, with alternative funding models like Venture Capital investment being real opportunities for developers.  Riot Games recently spoke to Gamasutra about how they have funded League of Legends without taking money from publishers and sacrificing IP ownership.

These new indie studios could partner up with hungry publishers like Warner Bros. Interative Entertainment, who seems to be pretty eager these days to try new things.  They’ve been acquiring quite a few studios over the past year, and most recently published 5th Cell’s Nintendo DS game Scribblenauts.  With 194,000 unit sold in the first month, I’d guess that 5th Cell is pretty damn happy with that arrangement.

What are your thoughts on the impact of the EA changes?  Where do you think the game industry is going next year, and beyond?  Am I full of shit?

Interested in your thoughts!


Social Media and Game Industry Web Roundup 11/1/09

Since I’ve got a lot more free-time now, I’ve set several goals for myself that I can now attain. One of those is catching up on a lot of reading, online and offline, since for the past few months I basically had to unplug a bit from all the game news, community management articles, books, etc.  It started this summer when I took over all the PR for gamerDNA’s relaunch, and then carried on through to the last couple months when things were still busy and slightly crazier.  They used to call me “The Internet” at work because I knew so much about current gaming and tech news…and I don’t feel so internet-y any more.  So anyways…I’m trying to fix that now, and I thought I’d create a blog post every once in awhile that shares some cool stuff I’ve come across in my internet travels.

BioWare Reveals Dragon Age’s “Massively Single-Player” Details – Stephen Totilo – Kotaku

Stephen Totilo has a really interesting article that goes into the details of the new BioWare Social Network that just launched recently.  On the surface the social network doesn’t look a whole lot different than most other social networks powered by Social Engine software.  The customization is in the rich features, though, and it sounds like BioWare has spent a lot of money tying the game to this social network.  The features described in this article get my really excited about this game and definitely make me want to check it out…at least for professional research purposes  😉

The Future of the Social Web – Brian Solis – PR 2.0

Forrester Research published a report that describes what they believe will be the future of the social web.  I happen to agree with a lot of it, and it actually describes a lot of what we built at gamerDNA.  Relevance and reacting to what we knew about a member were two huge factors in what we built at gamerDNA.  Definitely worth a read.  Makes me think about how this would affect game community websites specifically (in house sites, like WoW Armory for example), and not just 3rd party internet consumer websites.

5 Ways to Use Twitter’s New List Feature for Marketers  – Influential Marketing Blog

-This past week Twitter launched the List feature, which makes it so anyone can add a Twitter user to their own list, and that list can be shared with other people and even followed by others.  This blog article outlines some ways that people could use blogs and should help you think about some cool ways you could use Twitter Lists at your company.

From Strategy to ROI Model – slide deck from Dawn Lacallade, Community Manager for SolarWinds

As I get ready for job interviews, I’m trying to read up more on some various community manager topics and generally see how people are doing things these days.  I liked this presentation because it was very basic and didn’t skip over much as it explains the process of pitching and creating a Community plan for your organization.

Getting Started 1: Do you know what people are saying about you? -Fresh Networks

Fresh Networks wrote a blog post series/guide to help organizations “Get Started in Social Media”.  It’s all pretty basic, but I liked the list that they put together of free buzz tracking tools.  In the paragraph prior to the list, Fresh Networks says, “The best results come from using paid-for services..”.  I can’t really say this is right or wrong, since I didn’t have experience with paid services at a large scale.  I tried out Radian6 (the service mentioned in the article) at gamerDNA and wasn’t very impressed with it, but I think that probably has more to do with our scale at the time and the amount of conversations on the web. That and the price tag was pretty hefty for a startup like us.

If I remember correctly, it was roughly $5,000+ a year or more for the type of account we would need with Radian6.  It would have been a huge waste of money for gamerDNA, so we decided not to spend that money.  If you’re a larger company and/or have a large amount of mentions (to the point it is truly overwhelming and you need help sifting through it all), I suggest looking into these services.  Radian6 and Techrigy are two services that come to mind, and I know or have met people at both and they’re good people.  Hopefully at my next gig I’ll have the chance to check these services out – They’re doing some interesting stuff, if you’ve got the money in your budget.

The best buzz tracking services that would fit into this blog post are:  Google Blog Search, Technorati Search, Google Alerts, Twitter Search.  IceRocket search was basically worthless, bringing up posts that were (relatively) ancient, so it just turned into a waste of time when you checked your searches.  I covered this last year in my blog post “Are Video Game companies active in Social Media?“.

I think I’ll cover this topic in a bit more depth in a blog post later this week.  There are some decent new, free tools and services that can help you monitor your brand and interact with your community.  They can get you a long way, with no money spent at all (besides time).

Staying Power: Rethinking Feedback to Keep Players in the Game – Gamasutra

Microsoft Game Studios did some user research on gamers completing games and offers some solutions/insight into how game designers could help people complete their games.  This is a pretty in-depth article chock full of data..even with references at the end!  Worth checking out for sure.

That wraps it up for this blog post.  If you have any thoughts on the above articles, I’m interested in hearing them!


Sam “QforQ” Houston